Potentially the move will free up large tracts of prime land in the financial hub of Mumbai

India’srichest state has scrapped a law that controls urban land holdings, potentially freedingup large tracts of prime real estate in the financial hub of Mumbai, a move which sent shares of property firms up sharply.

A government spokesman in Mumbai said the assembly of the western state of Maharashtra on Thrusday repealed the Urban Land(celling & Regulation)Act....

Many potential buyers adopted a “wait and watch” approach in 2007 preferring to stay in rental accommodation than buy, writes RAMESH NAIR

After a record 50% plus price increase per annum in 2005 and 2006, the Chennai residential real estate market witnessed moderate growth in 2007 with prices increasing 8-12% across various micro markets. However most of this price increase was seen in the first quarter of the year after which the prices and sales volume stagnated. Although the office market saw a record 7 million sft absorption in 2007 indicating new job creation and a strong economy, this did not translate to direct increase in prices and volumes in the residential market as witnessed over the last three years. Many potential buyers adopted a “wait and watch” approach in 2007 preferring to continue staying in rented accommodation than buy. The number of apartments being sold in 4Q 2007 was also lower than 4Q 2006. Also, the home loan market, which was growing at 30 % plus in 2005 and 2006, saw a growth of only 10-15%.

The key reason behind this slowdown has been higher prices and interest rates, impacting affordability, and to be a lesser extent excess supply in a few micro markets, rather than slow down of economy. Developers, who were selling their entire projects in a few days, are now taking months to sell their unsold stock. Although, no major drop in prices are expected immediately as the vacancy rate of unsold completed residential real estate stock is still negligible. Developers have started offering a variety of offer such as free car parks and flexible financing options such as interest waiver during construction period so that they do not have to bring down the prices....

The law enables applications to be filed with local bodies and government agencies to obtain important information, writes G.ANANTHAKRISHNAN

What does a property buyer do about bad infrastructure and lack of amenities after having invested in a high-cost plot in an approved layout?

Many investors who buy a plot of land, even one approved by the Chennai Metropolitan Development Authority or the Directorate of Town and Country Planning find that they get poor amenities on the ground. Voluntary disclosure of the facilities that should form part of the layout based on the approval conditions is often weak or non-existent....

The I.T. Departmentacquired a property at Gandhi Nagar, Adayar when the agreement for this sale relating to property was submitted for getting the No Objection certificate. This was done on the ground that the apparent considerationwas less than the market value . The department assessed that the difference between the market value and registered value was more than15 percent.

The parties involvedsubmitted that one of the reasons for the reduction in price was that the original title deed property was lost and the buyer was willing to take the risk and make alternative arrangements for it. The additional cost so incurred was adjusted in pricing of the property. However the department overruled this this and acquired the property. The parties appealed (289 ITR 61(Mad) Ashok Leyland Finance Ltd vs Appropriate Authority, IT Department Judgement dated 12.12.06 ) and a single judge dismissed it. The parties subsequently appealed against the order of the single judge. The division bench set aside the order of the single judge and also quashed the pre-emptive purchase by the IT department.

The High Court observed that the loss of title deeds of the property is one of the relevant factors and it would undoubtedly diminish the value of the property....